Heartland Advisors Inc. Takes Position in Watsco, Inc. $WSO

Heartland Advisors Inc. bought a new position in Watsco, Inc. (NYSE:WSO) during the 2nd quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission. The institutional investor bought 49,860 shares of the construction company’s stock, valued at approximately $20,778,000. Watsco comprises about 0.9% of Heartland Advisors Inc.’s investment portfolio, making the stock its 29th biggest holding.

Several other large investors have also made changes to their positions in WSO. Torren Management LLC acquired a new position in Watsco in the fourth quarter valued at about $26,000. Bayban bought a new stake in Watsco during the fourth quarter worth about $29,000. Bamco Inc. NY acquired a new stake in shares of Watsco during the fourth quarter worth approximately $35,000. Laurel Wealth Advisors LLC acquired a new stake in shares of Watsco during the fourth quarter worth approximately $37,000. Finally, Quarry LP bought a new position in shares of Watsco in the fourth quarter valued at approximately $37,000. Institutional investors own 89.71% of the company’s stock.

Key Watsco News

Here are the key news stories impacting Watsco this week:

• Positive Sentiment: Zacks raised its EPS forecast for Q1 2027 to $1.93 from $1.92 and Q1 2028 to $2.05 from $1.93. Its FY2028 estimate also increased to $15.26 from $14.93, suggesting analysts still see longer-term earnings growth potential. Watsco stock information
• Neutral Sentiment: The firm maintained estimates of $13.53 EPS for FY2027 and $15.26 for FY2028, while its current full-year consensus reference stands at approximately $12.43 per share. The revisions indicate a mixed outlook rather than a broad change in the long-term investment thesis.
• Negative Sentiment: Zacks cut its FY2026 EPS forecast to $12.21 from $12.56 and lowered Q3 2026 EPS to $4.21 from $4.29 and Q4 2026 EPS to $2.13 from $2.15. These reductions point to softer near-term earnings expectations.
• Negative Sentiment: Estimates were also reduced for Q2 2027 to $4.61 from $4.75, Q3 2027 to $4.65 from $4.69, and FY2027 to $13.53 from $13.70. The repeated cuts may weigh on sentiment, particularly because Watsco already trades at a meaningful earnings multiple despite its recent earnings miss.

Watsco Stock Down 0.9%

Shares of WSO stock opened at $311.57 on Friday. The firm has a market cap of $12.85 billion, a price-to-earnings ratio of 27.02 and a beta of 1.05. Watsco, Inc. has a 12 month low of $300.66 and a 12 month high of $459.00. The stock has a 50-day moving average price of $363.17 and a 200 day moving average price of $385.73.

Watsco (NYSE:WSO) last released its earnings results on Wednesday, July 29th. The construction company reported $4.00 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $4.41 by ($0.41). The business had revenue of $2.10 billion for the quarter, compared to analyst estimates of $2.14 billion. Watsco had a net margin of 6.53% and a return on equity of 14.40%. The business’s revenue for the quarter was up 2.1% on a year-over-year basis. During the same quarter in the previous year, the company posted $4.52 earnings per share. Sell-side analysts predict that Watsco, Inc. will post 12.38 earnings per share for the current fiscal year.

Watsco Announces Dividend

The firm also recently disclosed a quarterly dividend, which was paid on Friday, July 31st. Investors of record on Thursday, July 16th were issued a $3.30 dividend. This represents a $13.20 annualized dividend and a yield of 4.2%. The ex-dividend date was Thursday, July 16th. Watsco’s dividend payout ratio is currently 114.48%.

Analyst Upgrades and Downgrades

Several brokerages have recently commented on WSO. Morgan Stanley boosted their target price on Watsco from $370.00 to $405.00 and gave the stock an “equal weight” rating in a report on Friday, July 10th. Wall Street Zen upgraded Watsco from a “sell” rating to a “hold” rating in a research report on Saturday, May 2nd. Robert W. Baird set a $400.00 price objective on Watsco in a research note on Thursday, July 30th. Stephens restated an “overweight” rating and set a $485.00 target price on shares of Watsco in a report on Monday, August 17th. Finally, Weiss Ratings restated a “hold (c)” rating on shares of Watsco in a report on Friday, June 26th. Two investment analysts have rated the stock with a Buy rating and nine have given a Hold rating to the company. According to data from MarketBeat.com, Watsco currently has an average rating of “Hold” and a consensus target price of $395.50.

About Watsco

Watsco, Inc is the largest distributor of heating, ventilation, air conditioning and refrigeration (HVAC/R) equipment, parts and supplies in the United States. Headquartered in Miami, Florida, the company operates a network of more than 600 branches across the continental U.S., Canada and Puerto Rico. Watsco serves residential and commercial contractors by providing essential components for climate control systems, including air conditioners, furnaces, heat pumps, coils, refrigerants, controls and electrical and piping supplies.

Founded in 1947, Watsco has grown from a single regional distributor into an industry leader through a combination of organic expansion, acquisitions and strategic partnerships with original equipment manufacturers such as Carrier, Trane, Goodman and Lennox.